TN HB1873

Local governments cannot increase property tax rates that would cause total revenue to exceed inflation plus 2% annually, or inflation plus 6% over three years, without voter approval through a referendum election

Tax rate increases exceeding these caps require a two-thirds vote by the governing body to place the measure on a general November election ballot, where a simple majority of voters must approve

Revenue from new construction is excluded from the cap calculations, allowing growth from development without triggering the referendum requirement

Exemptions apply to taxes levied for bond payments, actions by the comptroller of the treasury, and changes to utility rates for government-owned utilities

Effective July 1, 2026, applying to all tax years beginning on or after that date